Lathrop may pursue sales tax for police

LATHROP – Manteca did it in 2007, Stockton in 2005, and Ceres just last year. This year, it was Galt.

Among cities, it’s simply known as TAUT, an acronym that stands for Transaction and Use Tax or - in layman’s term - an additional sales tax.

Manteca voters imposed a half cent sales tax for public safety known as Measure M as a TAUT revenue source.

TAUTs are revenue vehicles for cash-strapped cities like Lathrop to raise funds that, according to the city staff report, “cannot be raided by Sacramento.”

The new taxes are earmarked for specific purposes. For Lathrop, the TAUT tax revenues would go toward reducing the need to cut back police force and services due to current and anticipated budget deficits.

If approved by Lathrop voters, TAUT would add about $1 million annually to the city coffers.

However, it takes money to make money even for cash-challenged cities. Lathrop’s total expense, if approved, would be to the tune of $197,000.

Broken down, the costs would be distributed in this manner: $142,000 for a consulting firm’s services (further broken down into $55,000 for the consultants’ fees; $45,000 for the opinion research; and, $42,000 for direct mailing), with the remaining $15,000 and $40,000 to be paid to the San Joaquin County of Voters and the State Board of Equalization, respectively. City staff is proposing to take that money out of the general fund reserves.

There is a clincher though, and an expensive one if the measure does not succeed in the ballot. Lathrop voters will first have to approve this TAUT by a majority approval – that is, two-thirds or 66.67 percent of the votes – because the funds derived are earmarked for a specific purpose, in this case, police services. It’s a simple majority – 50 percent of the votes plus 1 – voters’ approval that would be required if the revenue-raising measure is for a general purpose.

And here’s where the consulting firm’s assistance becomes critical in getting the measure passed on the ballot. Among cities that have had successful passage of such measures, the success was due to a couple of reasons: they hired a consulting firm, and they started the voter-assessment process early. To get the measure in the November 2010 general elections, Lathrop needs to start the process of assessing how voters feel about the proposed tax and how many would vote for it by December. Getting these feedbacks from the community would be the job of the contracted consulting firm, which will then report the results to the council for denial or approval.

The consulting firm that is being recommended to the council is the Lew Edwards Group which, according to city staff, “has a success rate of 93 percent” in the polling undertaking.

Under the proposed timeline which outlines the steps involved in the voter research, the city is provided two opportunities to “opt out” of the contract with the consultants. The first opt-out will have the city losing $40,000 of the deal and $64,000 at the second opt-out opportunity for a total loss of $104,000.

Lathrop council members will discuss all of the options above at their meeting tonight and then vote whether they want to invest $197,000 of the city’s general fund reserves to establish a local tax for police services. This will involve approving a budget amendment that would allocate funding for this project, and authorizing the city manager to execute a contract with the consulting firm, Lew Edwards Group.

The council will meet in closed session at 6 p.m. followed by the public portion of the meeting at 7 p.m. in the Council Chambers at City Hall, 390 Towne Centre Drive at Mossdale Landing.